February 10, 2004

For corporate bankers in the U.S., this will be the year of the SWIFTNet upgrade. "SWIFTNet has the potential to really change and improve the connectivity between corporations and financial institutions," says Bray. "Over FIN, the existing X.25 network of SWIFT, it's very expensive to implement."

But it may take a little while longer to get that connectivity rolled out to the end users, treasurers and financial officers at large corporations. "There's simply not an appetite for large-scale investment in treasury management systems," says Gilmore Bray, program manager, corporate solutions for Misys plc (London). "Corporations are looking for lower-cost alternatives which allow them to improve control."

One solution is the service bureau. "You will see vendors that are creating service bureaus which act as SWIFTNet gateways," predicts Bray. "The service bureau concept could enable smaller banks, funds managers and corporations the ability to access SWIFT."

But there's a somewhat steep learning curve involved. For instance, although banks will have access to several new services, such as continuous linked settlement through CLS Bank, and a whole host of new counterparties, it might take time to convince smaller companies to climb aboard. "I don't think this is the year the third-party business is really going to take off," says Bray. "This may be a year that the settlement members that offer third-party services are out educating corporations about CLS."

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